Oct 10 - Fitch Ratings has assigned Coface Holding S.A.S. (Coface Holding)a Long-term Issuer Default Rating (IDR) of 'A'. The Outlook is Stable. Fitch hasalso assigned Coface Holding a Short-term IDR of 'F1' and an expected 'F1(EXP)'short-term rating to the EUR250m commercial paper (CP) which the company expectsto issue later in 2012.
Coface Holding's ratings reflect those of its wholly-owned major operationalentities, and mainly the key entity which is Coface S.A. (Insurer FinancialStrength (IFS) rating: 'AA-'/Stable; IDR: 'A+' Stable), and whose ratings wereaffirmed on 03 May 2012 (see 'Fitch Affirms Coface's IFS at 'AA-'; OutlookStable' at
Coface Holding's Short-term IDR is directly derived from Coface's Long-term IDRaccording to Fitch's standard insurance methodology.
The CP's 'F1(EXP)' Short-term debt rating, which is subject to receipt of finaldocumentation not materially differing from the original documentation, is atthe same level as Coface Holding's Short-term IDR. The CP's short-term debtrating also reflects the EUR250m liquidity back-up line to be provided by highcredit quality banks including: Societe Generale ('A+'/Negative), CreditAgricole ('A+'/Negative), Natixis ('A+'/Negative), HSBC ('AA'/Negative) andRoyal Bank of Scotland ('A+'/Stable).
Fitch considers the issuance of EUR250m CP as consistent with Coface group'splans to progressively reduce its funding reliance on Natixis, its ultimateowner.
Fitch expects financial leverage at Coface group level to remain low and in linewith its current rating as it expects the CP issuance to replace financingpreviously provided by Natixis rather than to increase financial debt levels. Atend-June 2012 financial leverage (excluding operating debt) was 1%, unchangedfrom end-2011.
Although unlikely in the short to medium term, factors that could trigger arating upgrade include an upgrade of the ratings of the core insurance operatingactivities of the Coface group.
The ratings could be downgraded if Coface group's credit quality deteriorated sothat its combined ratio remained consistently above 100% or there was a materialand sustained fall in its current capital levels.
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The ratings above were solicited by, or on behalf of, the issuer, and therefore,Fitch has been compensated for the provision of the ratings.
Applicable criteria, 'Insurance Rating Methodology', dated 19 September 2012, isavailable at
.Applicable Criteria and Related Research:Insurance Rating Methodology(New York Ratings Team)